Chile: A Strategic Haven for Wealth Preservation and International Relocation

In the current global climate, characterized by rising geopolitical instability and increasing tax pressure in traditional European jurisdictions, the Republic of Chile is emerging as one of the most sophisticated and secure havens for wealth preservation and strategic future planning. In this article, our international relocation specialists in Prague provide more insight into this country.

This country, a long-standing member of the OECD, offers a unique combination of legal certainty, a liberal economic environment, and a high quality of life, making it an ideal destination for creating a robust "Plan B". For a Czech investor or entrepreneur, Chile is not just a distant exotic destination, but a partner with very specifically defined legal and tax ties that facilitate the transfer of assets and personal relocation. This analysis examines all aspects of this process in detail, from purchasing real estate and establishing business companies to immigration strategies and tax optimization under existing international treaties.

Legal Foundations and Procedural Aspects of Real Estate Acquisition

Purchasing real estate in Chile represents a cornerstone for building a permanent base for a foreign investor. The Chilean real estate legal system is built on the principle of absolute registration and transparency, which minimizes risks common in other Latin American countries. However, the process is formal and requires strict adherence to legal procedures to ensure full legal protection for the owner.

The basic prerequisite for any real estate transaction is obtaining a tax identification number, known as RUT (Rol Único Tributario). For foreigners who do not yet have permanent residency in the country, there is a specific instrument called the Investor RUT. Without this number, it is not possible to sign a purchase agreement before a notary, pay taxes, or register ownership rights. Obtaining a RUT is a process that can be efficiently delegated to a local legal representative via power of attorney. For individuals, this number is usually generated within three to five business days, while for legal entities, the process may take approximately ten days.

The purchase process itself begins with a due diligence phase, known in Chilean legal practice as estudio de títulos. This phase is absolutely critical and involves an in-depth review of the property's ownership history over the last 30 years. The goal is to confirm that no defects occurred in the history of transfers that could invalidate the current title and to verify that the property is free of any encumbrances, liens, foreclosures, or judicial injunctions. This process also includes checking compliance with regulatory, tax, and labor regulations in the case of commercial properties, as well as verifying the existence of all necessary permits and licenses.

Once the title search is completed with a satisfactory result, the parties proceed to sign a promissory purchase agreement (Promesa de Compraventa). This document defines the price, the final sale date, and the conditions that must be met. At this stage, a deposit is usually made, typically held by a notary in the form of a bank guarantee or check, and is released to the seller only after the conditions are met. The final purchase agreement (Escritura Pública) must be drafted as a public deed before a notary. A notary in Chile acts as an independent guarantor who verifies the identity of the parties and the contract's compliance with the law. However, the process does not end with the signature at the notary; ownership rights are transferred to the buyer only at the moment of registration in the Real Estate Registry (Conservador de Bienes Raíces) in the relevant jurisdiction.

In the real estate sector, there are specific restrictions that a Czech investor must take into account, especially when focusing on strategic or rural areas. Chile applies strict rules for land in border zones and near the coast. According to Decree DL 1939, state-owned land within a 10 km strip from the borders and 5 km from the coast can only be alienated to Chilean persons, unless a legal exemption is granted. An even stricter regime applies to nationals of neighboring countries (Argentina, Bolivia, Peru), who may not acquire any real estate titles in declared border zones without the consent of the President of the Republic. For citizens of the Czech Republic, these restrictions are less invasive but still require consultation with the DIFROL authority when purchasing in sensitive areas.

Another specific restriction is so-called tierras indígenas (indigenous land). According to Law No. 19.253, these lands cannot be legally sold or transferred to persons who are not members of the given ethnic group. Any contract violating this rule is absolutely null and void, and courts may cancel it without compensation. Therefore, it is essential that legal due diligence includes verification of the land classification in the CONADI registers. A similarly specific regime applies to Rapa Nui (Easter Island), where ownership options for foreigners and mainland Chileans are extremely limited.

Corporate structures and management of corporate assets

For the relocation of business activities or the management of family wealth, Chilean law offers several forms of entities that differ in their degree of flexibility, administrative complexity, and shareholder anonymity. Choosing the right structure is crucial for long-term asset protection and efficient capital flow management.

Currently, the most significant and frequently chosen structure for foreign investors is the Sociedad por Acciones (SpA), or simplified joint-stock company. The SpA was created to provide a modern and flexible tool for venture capital, combining the advantages of capital companies with administrative simplicity. One of the greatest advantages of the SpA is the possibility of having a single shareholder, which is not the rule for other types of companies. This allows a Czech investor to have 100% control over the Chilean entity without the need to find local nominees to meet minimum shareholder requirements. Furthermore, the articles of association of an SpA can be customized in great detail, defining different classes of shares with varying voting or dividend rights, making it an ideal tool for holding structures.

In contrast, the Sociedad de Responsabilidad Limitada (SRL), which is the equivalent of a Czech limited liability company (s.r.o.), is a structure built on trust between partners. It requires a minimum of two and a maximum of fifty partners. The main feature of an SRL is that any change in the company – whether it involves a transfer of interest, a change of registered office, or a change of managing director – requires the unanimous consent of all partners and a subsequent modification of the deed of association via a public deed. While this provides a high level of protection against hostile takeovers or unwanted changes, it also makes the company very inflexible in the event of disagreements between partners. The SRL is therefore recommended more for closed family businesses where frequent entry of new investors is not expected.

When establishing any Chilean company, a foreign investor must appoint a legal representative who is a permanent resident in Chile. This representative acts on behalf of the investor before the tax authorities (Internal Revenue Service – SII) and is responsible for the formal steps associated with the company's formation. The incorporation process itself involves the preparation of a public deed, its notarization, registration in the Commercial Register (Registro de Comercio), and publication of an extract in the Official Gazette (Diario Oficial). Subsequently, a notice of commencement of activities (Iniciación de Actividades) must be filed with the SII, a step that activates the company's tax ID and allows it to issue invoices and conduct business operations.

Chile is also known for its open approach to the repatriation of capital and profits. There are no foreign exchange restrictions in place that would prevent an investor from transferring funds out of the country, provided that reporting obligations to the Central Bank of Chile are met for transactions exceeding USD 10,000. This represents a fundamental difference compared to many neighboring countries, where there is a risk of asset freezing or forced currency conversion.

Immigration Strategy and Family Integration

Relocating a family to Chile as part of a backup plan requires a strategic choice of the correct residence permit. The Chilean migration system was modernized in 2021 by the new Law on Migration and Foreigners (Law No. 21.325), which introduced clearer rules for various categories of applicants.

The most common route for individuals with sufficient capital is the "Rentista" visa. This visa is designed for those who can demonstrate a regular monthly income from passive sources outside of Chile, such as investment returns, rental income from properties in the Czech Republic, or pensions. The recommended minimum income for a single applicant is approximately USD 1,000 per month, with additional amounts required for dependent family members. The visa is typically granted for two years and is renewable; after two years, the holder gains the right to apply for permanent residency (Residencia Definitiva).

For active entrepreneurs, the "Investor Visa" program is available. This program requires either a direct personal investment exceeding USD 500,000 or proof of a senior management role in a Chilean company where foreign capital holds at least 10% of the voting rights. Although the formal threshold is set high, the government agency InvestChile may support smaller projects if they demonstrate potential for job creation or technological contribution. The advantage of this visa is accelerated integration into the Chilean system and the possibility of including family members in the application as dependents.

Chile offers excellent digital and communication infrastructure, making it an ideal location for so-called digital nomads. Average internet speeds in major cities range between 50 and 100 Mbps, and the country has extensive 5G network coverage. Although Chile does not yet have a specific visa for digital nomads, most remote professionals utilize the Transitory Stay permit, which allows legal residence and work for foreign clients for up to 180 days per year. Another advantage of Chile is its alignment with North American time zones, facilitating collaboration with global teams.

Obtaining Chilean citizenship is a long-term goal for many investors, as the Chilean passport is among the most powerful in the world, allowing visa-free entry to over 170 countries, including the USA and EU member states. After five years of legal residence (including time spent on temporary residency), a foreign national may apply for naturalization. Chile recognizes dual and multiple citizenship, which is essential for maintaining a Czech passport.

International Taxation and Bilateral Agreements

A key factor making Chile an attractive destination specifically for Czech residents is the existence of the Double Taxation Treaty between the Czech Republic and the Republic of Chile, which has been in effect since 2017. This treaty significantly reduces the tax burden on cross-border operations and provides legal certainty when managing assets.

Under the provisions of this treaty, withholding tax rates at the source in Chile are significantly reduced compared to the standard rates Chile applies to countries without a treaty (where the rate is 35%). For Czech entities, the following preferential regimes apply:

The withholding tax rate on dividends is limited to 5% if the beneficial owner is a company that directly holds at least 25% of the capital of the company paying the dividends. In all other cases, the maximum rate is 15%. This provision allows for highly efficient repatriation of profits from Chilean real estate or companies back to the Czech Republic.

For interest payments, a reduced rate of 4% applies thanks to the Most Favored Nation (Most Favored Nation – MFN) clause, provided the recipient is a bank, insurance company, or financial institution, or if the interest arises from the sale of machinery and equipment on credit. In other cases, the rate is capped at 10%. This is crucial for structuring intra-company loans between a Czech parent company and a Chilean subsidiary.

The rate for royalties is 5% for the use of industrial, commercial, or scientific equipment and 10% in all other cases. This can be utilized when licensing software, trademarks, or technical processes to Chilean entities.

Within the Chilean domestic system, the "Pro Pyme" regime is particularly interesting for smaller investors. This system is designed for small and medium-sized enterprises and offers a reduced corporate tax rate of 25%. A fundamental advantage is that company owners can use 100% of the amount paid by the company as a tax credit against their personal income tax. Conversely, larger companies fall under the partially integrated regime with a rate of 27%, where only 65% of the tax paid can be credited.

When planning the transfer of assets, it is necessary to consider Czech Controlled Foreign Company (CFC) rules. If a Czech company or resident holds more than 50% in a Chilean entity that lacks genuine economic activity and its taxation is less than half of the Czech rate, its passive income (dividends, interest, rent) may be included directly in the tax base in the Czech Republic. However, the existence of a bilateral treaty and the fact that the standard corporate tax in Chile (25–27%) is higher than in the Czech Republic (21%) significantly minimizes this risk for active investments.

Banking System and Financial Flows

The financial infrastructure in Chile is modern and stable; however, it represents one of the greatest administrative challenges for foreigners. Chilean banks are known for their strictness when opening accounts for non-residents, due to stringent anti-money laundering regulations and efforts to minimize risk.

For an investor who does not yet reside in the country, it is almost impossible to open a standard current account (cuenta corriente). Banks usually require proof of permanent residency, a two-year history in the country, and a steady income in Chilean pesos. However, there are functional alternatives designed specifically for investors. The most accessible route is opening an investment account with the brokerage division of a large bank (e.g., Santander, BCI, Banco de Chile). This account serves primarily to receive funds from abroad, exchange them, and subsequently use them for asset purchases. The process requires presenting a valid passport, an investor RUT, and passing a deep KYC (Know Your Customer) check.

A specific tool of the Chilean financial market, essential for real estate purchases, is the Vale Vista. This is a banking document representing an irrevocable order by the bank to pay a certain amount to a named person. In practice, the buyer deposits money at the bank, which issues the Vale Vista, and this document is physically held by a notary. The notary releases it to the seller only after the presentation of a certificate from the real estate registry confirming that ownership has been successfully transferred. This mechanism eliminates the risk of the buyer paying without receiving the property, or the seller transferring the property without receiving payment.

When transferring large volumes of assets (existing assets) from the Czech Republic to Chile, it is necessary to account for the reporting obligation to the Central Bank of Chile for transactions exceeding USD 10,000. While Chile does not have foreign exchange controls, these transactions must be conducted through the formal exchange market (banks). For Czech investors, it is also important to know that Chile has no restrictions on the repatriation of profits; funds once invested and properly reported can be moved back at any time, including capital gains.

Strategic Risk Management and Expert Support

Implementing a "Plan B" in Chile requires more than just legal knowledge; it requires an understanding of the local context and a strong network of contacts. For Czech investors, significant advantage is provided by cooperation with international law firms that have a direct presence or strong partnership ties in the region.

An example is the ARROWS International network, which, through its ten regional offices in the Czech Republic and international connections, enables the coordination of transactions in Chile in real-time. A key advantage of this network is the high professional indemnity insurance (up to CZK 400,000,000), which covers risks associated with advisory services even for large-scale investment transactions. Thanks to the integration of modern platforms like Anywhere.Legal, clients can monitor the progress of their case and communicate with verified lawyers directly in Chile.

In Chile, the partner of this network is the firm Garfias & Cía, which is internationally recognized (e.g., in the Chambers & Partners and Legal 500 rankings) as a leader in tax law and foreign investment. Gonzalo Garfias, the firm's founding partner, possesses deep expertise in international taxation and asset restructuring for family offices. This synergy between our Czech legal team, who understand the client's initial situation, and Chilean experts familiar with local practice, is critical for eliminating risks such as:

Even if a transaction appears purely private, investments in certain sectors (energy, telecommunications, banking) are subject to oversight in Chile and may be subject to screening in the Czech Republic under the Foreign Investment Screening Act. Our expert team helps identify these high-risk sectors and ensures timely communication with the relevant ministries. Errors in preparing powers of attorney or documentation for the RUT (tax ID) can stall a transaction for months. Professional management ensures that documents are correctly apostilled and localized according to Chilean standards. Without an in-depth title search, there is a risk of purchasing land with unresolved water rights or encumbrances dating back to the agrarian reform era, which can significantly devalue the investment.

Conclusion and Recommended Procedure for Implementing "Plan B"

Chile represents a unique opportunity for Czech investors to diversify assets and create a secure base in a jurisdiction that shares Western legal values but offers higher dynamism and less ideological regulation. A successful relocation of assets and family should be carried out in the following logical steps:

1. Preparation Phase (in the Czech Republic): Analysis of existing assets and determining which parts will be relocated to Chile (real estate, cash, company shares). Preparation of powers of attorney for Chilean representatives.
2. Identification Phase (in Chile): Obtaining an investor RUT for the individual and any potential new company. Appointment of a local legal representative.
3. Corporate Phase: Establishing an SpA type company to serve as an investment vehicle. Opening an investment account to receive funds from the Czech Republic.
4. Acquisition Phase: Searching for real estate or corporate shares, performing thorough due diligence (studying titles 30 years back), and executing the purchase through the Vale Vista system.
5. Residency Phase: Submitting an application for a Rentista or Investor visa based on documented income or the realized investment. Family relocation and integration into the local system (schools, health insurance).
6. Tax Phase: Setting up income flows in accordance with the bilateral double taxation treaty to ensure efficient distribution of dividends and interest with reduced withholding rates (5–15%).

Chile is not only a refuge in times of crisis but a strategic base that, thanks to its stability and connectivity to global markets (including ZOFRI duty-free zones and export advantages to Brazil and the entire Mercosur), enables long-term growth and protection of the family legacy for future generations. Cooperation with proven legal networks like ARROWS International ensures that this complex process is carried out safely, transparently, and in accordance with the highest international standards.  

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue. While we strive for maximum accuracy, Czech legislation and its interpretation evolve over time. To verify the current wording of regulations and their application to your specific situation, it is essential to contact ARROWS law firm in Prague directly (office@arws.cz). We bear no responsibility for any damages or complications arising from the independent use of information from this article without our prior individual legal consultation and professional assessment. Every case requires a tailor-made solution; therefore, do not hesitate to contact us.

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